Finding dollars to save
Money for future goals and emergency funds can be generated in three ways.
Why save? Individuals and families save money for their future goals and to have an emergency fund cushion available for unplanned expenses. The toughest part is finding the dollars to save. Hard-to–find savings dollars can be generated in three ways:
1. Increase income.
- Take on a second or part-time job, but try to make this a short-term situation.
- Enter or return to the workforce if you have not worked for a while.
- Do you have extra items lying around the house, yard or workshop? Consider selling them online, in the classifieds, or in yard or garage sales.
- Do you have a hobby that might be able to generate income?
2. Cut or decrease spending.
- Break costly habits. For example, cut back on lunch cost by packing instead of purchasing, reduce smoking or decrease the amount of times you buy coffee.
- Track how you spend cash every day; it will surprise you how much small purchases like coffee, soda and snacks cost by the end of the week.
- Switch to comparable brands with lower prices. Stop purchasing items that are really “wants”, not necessities.
- Trade your skills and talents for needed services that would otherwise cost you money.
- Do an internet search using the words “ideas for cutting expenses”, and you will hit a treasure of ideas.
3. Direct or redirect current resources.
- Pay yourself first through automatic payroll deductions.
- Add all “found money” or “windfalls” to your savings account. For example, tax refunds, overtime pay, raises, gift money, refunds and rebates.
- Pay installments to yourself after paying off a loan (e.g. keep paying that car loan to a savings account for the next car).
- Investigate your current income tax withholdings. Many people tend to over withhold.
Changing habits and making sacrifices is never easy, but the reward is a sense of financial security while successfully reaching your goals.